Downtrend on South Florida Housing Continues

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What do analystsin South Florida predict about its housing slump?Well, they sayit is far from over.
According tothe National Association of Realtors, the worst part of the U.
S.
housingsetback is over but others are doubtful.
The Realtors group saidthat the annual growth rate of sales of existing U.
S.
homes will be6.
29 million in the first quarter, erasing the five consecutive quarterlydrops.
About 15 percent of new home sales will recover duringthe fourth quarter ofyear 2007 wherein transactions is targetedto grow at an annual rate of 967,000 after dropping to 944,000 in thethird quarter, the Realtors said further.
The springseason is going to be crucial in determining when it begins but theconsensus shows that the recovery will be the year 2007, according toTodd Vencil, an analyst at BB&T Capital Markets in Richmond, Virginia.
Toll Brothers,a luxury home builder, said last week that housing demand may pick upnext year except for Palm Beach and Broward counties, according to someexperts.
Analyst MikeLarson of Weiss Research in Jupiter said he expects people to put theirhomes back on the market after the holidays which could add more gluteven with the stabilization of mortgage rates and the number of homesfor sale.
In view ofthe above, prices will continue to decline.
Larson said furtherthat a peak in supply and bottoming prices will contribute to a stillweak 2007 market.
Brad Hunter,West Palm Beach housing analyst said that those investors who boughtat the height of the 2005 boom might sell at a loss in which case moresales will occur, thereby this might contribute to the rebound of theSouth Florida market.
But people are stubborn, he said.
March to Juneis the spring selling season where more than half of all U.
S.
home resalesoccur whereas the busiest time for new home markets starts in February.
Building a typical house last for six months and most families wantto move in September just before the school year starts.
Fannie Mae,the largest mortgage buyer expects home resales to gain in 2008”s second quarter, according to a latestforecast issued November 15.
Freddie Mac, the no.
2 mortgage buyer,said last week that housing market will probably rebound in the lastquarter of 2007.
John Lonski,chief economist for Moody’s InvestorsService, said that it will take three to five years to pass before housingstarts and home sales return to their peaks.
Sadly, sales of existinghomes probably will sink 7 or 8 percent in 2007,in comparison with this year and new home sales may fall 9 or 10 percent,he said further.
NAR, the tradegroup, said that rates for a 30-year fixed mortgage will average 6.
6percent next year, the highest since 2001 at 7.
2 percent.
Thisyear, the average rate will be 6.
4 percent, the group said.
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